One of our founding ideologies is transparency, and we even use this image of binoculars as a reminder of its importance. Transparency is a unique concept in our industry because the bulk of investors have none. The big brokerage houses provide their clients little or no information on fees, returns, or portfolio allocations, and they’re happy doing so to keep a shroud of mystery over how much their clients are overpaying to underperform. This month’s newsletter focuses on various issues around transparency and our take on the topic.

One of the first places to seek transparency with investing is in the kind of relationship your advisor or broker has with you. There are two distinct standards of care that divide our industry:

• Suitability, which means your broker can sell you anything that they think is a reasonable fit for your situation, and
• Fiduciary, which indicates a relationship where your interests are placed above those of the advisor.

For a brief, entertaining look at the difference, watch this video: Butchers vs. Dietitians.

A recent editorial in the St. Louis Post-Dispatch discusses the topic, and highlights the conflicts of interest present not only for the advisors, but also for the politicians debating calls to impose the fiduciary standard on traditional brokers. To quote this editorial, “It would put some financial services advisers out of business. That’s OK. In fact, it’s good. The ones it puts out of business should go away and the ones that remain should be those who want to put their clients’ needs and desires above their own.”

At Hill Investment Group we believe all financial advisors should be held to a fiduciary standard and think the proposed changes are good news for investors.

Although wealthy families often find themselves buried in complexity, we work diligently to help them find transparency and simplify their financial lives.